The Blind Man In The White House

Photo: Vice President Joe Biden appears to temporarily lose his mind during President Obama's jobs speech on 9-8-11. This is not an altered photo, but a well-timed freeze-frame from a video recording made by Russ Allison Loar.

Obama lost his way. He is drowning in economic problems: unemployment doesn’t fall, au contraire; the economy is in a virtual standstill; the Government debt reaches dangerous heights; the yearly deficits are just plain immoral, and the dollar is weak. He still believes it’s the government’s task to create jobs by pumping borrowed money into the economy. The friendly explanation is he has no clue how a free market economy works. The more stringent view is he hates the free market and wants to destroy it. Today, people are not any more afraid to ask: Why does he repeat the same failed policies over and over again?

His reactionary collectivist ideology blinds him. He is unable to backtrack on his previous decisions. He believes his revolutionary changes (ObamaCare; the nationalization of the car industry, of the student loans, of the mortgage loans; his vast extension of the union’s power; his mammoth expansion of regulations on everything that moves or grows) as essential to his policy, as the defining factor of his presidency. Very probably he believes the next points are proof of his success:

47% of the population depends of government handouts in one form or in another,

only 49% of the people pay income taxes,

3% of the citizens pay over 50% of the income tax,

the component in GDP of the Federal Government grew from 20% to over 25% under his watch.

Yesterday Thursday September 8th, he read again from his teleprompter his plans to revive the American economy. It was ‘all show and no substance’. This was the reason why he insisted to have his reading exercise in front of Congress, on the highest political platform of the USA. Such shows are normally limited to once a year.

His proposals are only a déjà-vu of his old tricks, which don’t help the country forward, but paralyze the economy. He said nothing we haven’t heard before. Obama wants to borrow another 400 billion from the Chinese (?), and spend it on infrastructure. Although, the previous trillion spent on such stimulus had a negative impact on the economy and on employment. He wants to prolong again unemployment benefits. Pay money to people because they are without a job is considered the ‘best’ stimulus for the economy by the Democrats. But, they are afraid to use that ‘stimulus’ word again. Today the word provokes laughter at the Obama policies. Obama wants to give again many billions to the States so they can pay their unionized bureaucrats and keep them on the job. Which States really need this money? The States that are lead by Democrats to bankruptcy, for example my own home State of California.

But wait, Obama will only next week tell us how he will pay for all the new expenses. Why didn’t he tell us yesterday? We know what to expect: higher taxes and phantom savings over the next 10 years. This will never pass the Republican House.

However, he also offered some positive measures. The government will pay its vendors sooner (no kidding); the taxes on wages will be halved; businesses get a tax credit for every veteran hired, etc. The problem is, Obama packs everything together in one ‘all or nothing’ deal. This proves Obama’s aim with this speech was pure politics: corner the Republicans, and blame them for the lack of jobs.

Obama accuses Congress for all economic problems, but he is silent about his absolute majority he enjoyed in both chambers of Congress for over one year, and about the control over both chambers he had for the first two years of his Presidency. The Republican majority in the House is only 8 months young. Obama was able to push through Congress all the laws he wanted for two long years. He used this advantage to the fullest extent, even against the voiced opposition of the American population.

For almost three years he sits on the trade agreements between the US and Columbia, South Korea and Panama. He refused to introduce them in Congress for a vote. Last night he presented the situation as if it’s Congress fault these agreements were not ratified.

As a first reaction the Republicans said to welcome negotiations on Obama’s proposals to boost the economy, and lower the unemployment.

The recent poll by NBC/WSJ shows only 42% of the Americans consider Obama a strong leader. That’s almost 40% less than at the time he became President. Obama is finished as a President. He will NOT be reelected. The majority of the Americans have stuck a needle in his balloon. Most Americans believe Obama is a nice guy, but totally not up to the task to be President.

Confront Obama’s ideas with the proposals of the different Republican candidates for the Presidency in their TV debate the night before Obama’s speech. All of them focus on the growth of the economy, by which unemployment should fall fast, and by which government’s income should rise faster. All candidates agree on the strategy. We see only differences in tactics, in personality, and in how fast and how far they would go implementing their policies.

Some examples.

Radical and meaningful cuts in business income tax: from 39% now to 25%, or to 9%, or even to 0%. The same drastic tax cuts would be offered to private citizens. To balance this measure, all exceptions and loopholes would be abolished. For example: mortgage deductions, child deductions, all subsidies to businesses and to green energy schemes. All candidates pledged not to raise taxes.

Cheap in the US produced energy for all. Energy is the motor of the economy. The purpose is to create a renaissance of manufacturing in the USA. The Republican proposal: remove all impediments and regulations that interfere with the mining, exploitation and use of the enormous US reserves of oil, natural gas and coal.

Fast dismantling of the government and its power over citizens and business. The government IS the problem. The slice of GDP produced by the government must be pushed back under 20%. The suffocating ObamaCare will be repealed immediately, as will most of the new regulations on the financial institutions. All new preferences and extensions of Union power will be annulled. Departments, as for example the Department of Education will be closed, and their tasks delegated to the individual States. Healthcare will be exposed to the free market. Tort reform to lower doctor’s insurance premiums and to make the loser pay the attorney’s costs of the winner.

Responsibility of the individual. People will be permitted to save money in a tax-free account to pay for future health costs. Patients would be free to choose the doctor they want, or the remedy they prefer. Parents would get vouchers and be able to send their kids to the school of their choice: public or private.

Reform today’s Social Security paying the pensions of the retirees. Candidate Perry labeled the actual system a ‘Ponzi Scheme’. With reason. The new members, the young workers of today, pay into the system. Their money is used to pay the earlier registrars, the retirees. The young will never see their money back, because the number of new entrants in the system is dramatically shrinking while those who get the money now live longer. One proposal: the young will be able to invest up to 10% of their income tax free in special accounts.

Medicare, the nationalized health system for the elderly pays doctors a defined amount for every procedure and drug. This means the patient has absolutely no idea how much the cure costs, and doesn’t care. This system would be replaced by giving every body a voucher to buy on the free market the health insurance of his or her choice.

It is obvious for most Americans who the adults are in today’s American politics: the Republicans.

Let's accept the proposition that the current economic woe comes from high unemployment level in the US (Germany's strong economy is closely related to its low unemployment rate, and it's looking to import more skilled labor).

The US import most of consumer products and have a net trade deficit with China. An unpopular and "unorthodox" import tariff will certainly increase US employment (due to increased demand of US-made goods) and reduce the trade deficit. From increased manufacturing activities there will be wealth multiplication.

China has "downloaded" the killer apps of economic prosperity and nothing except an import tariff will slow down its ecnomic growth and world expansion via its low cost labor and non-existant social programs.

It would seem that, when your assertions are confronted, you prefer to present another set of assertions elsewhere rather than deal with the stated objections. You seem to think that no one would notice how silly these (old and new) assertions of yours really are!?

1) This time your opening sentence is a real whopper. The "current economic woes" are supposed to..."come from high unemployment in the US"?? Could it be that you got it backwards, i.e. that high unemployment is a result from "current economic woes"? I think so. Indeed, high unemployment is perhaps the biggest or most consequential of "current economic woes" itself. Unemployment is a result or consequence of bad (labor market) policies; it is not a "cause" of anything of economic consequence. Besides high unemployment, the other great contemporary "economic woe" is low output/income growth in the US and much of Europe, and that is also a result (not a cause) of bad policies. We could discuss this matter further, if you so wish, but we cannot do so unless you can first distinguish between causes and effects/results.

2) As I said earlier, there is no relationship between the degree of openness of the trade regime of a country and its unemployment level over the medium to long term. There can be short-term employment 'shocks' for which there are anti-dumping provisions under WTO regulations. You seem to be aware that Germany's unemployment level today is relatively low, but surely Germany faces the same competition from China as the US does. Ask yourself the question: why would this Chinese competition lead to low unemployment in Germany and high unemployment in the USA? The answer is multifaceted, but resides primarily in the (liberalising) labor market reforms that Germany undertook during the first half of the past decade (still under Social Democrat Schroeder) and that were 'kept' by the Merkel government. Once more, employment levels normally depend on the flexibility of labor markets, and not on anything else. There is no need to look for scapegoats in Chinese 'practices'.

It would be advisable for you to stop parroting media nonsense from economically-illiterate journalists, and to stop giving Obama and his trade union cronies a 'free pass' for their destructive economic policies.

Obama's timid plan for the economy won't do much good without GOP's support, but even with GOP's vote on the corresponding budget, only minor job creation will result. The systemic problem of job loss lies right there: job loss to countries with lower wages. An effective action plan must include import tariff, shorter work week, elimination of tax loopholes. But all that is unpopular and non-PC therefore have no chance of being even proposed.

Free trade is only good for net exporter. "Free market" is an illusion when the biggest player doesn't play a fair game.

GOP has determined to make Obama a one-term president. The US economy will accordingly suffer from such antagonistic policy. That simple.

1) Obama's "timid plan"? After 3 years of unsustainable federal deficits of over 10% of GDP, is it not silly to talk of a "timid plan"? Anything over 3% is a bad idea. You are under the mistaken illusion that job creation has much to do with government budgets. Virtually every fast growing economy has either budget surplusses or very modest deficits. Job creation is essentially a function of FLEXIBLE labor market structures and of investor confidence. Both of these are incompatible with Obama 'policies'.

2) We do agree on eliminating tax loopholes. Obama does not, since he has done the opposite in his first two years (with Pelosi and Reid in control of Congress). A simple (and stable/permanent!) tax structure does help a lot with investor confidence.

3) Free trade is a complex issue. As a general rule. unemployment levels are not related to the degree of openness/closedness of the trade regime.

4) "Shorter work week" is a bad idea. It only worsens the competitiveness of your enterprises, and increases unemployment over time. The French tried that and have learned that lesson.

5) In a 2-party system, obviously either party aims for making the other party's leader a "one-term President". There is nothing wrong with that, and it certainly does NOT account for bad policies. The US economy does NOT suffer from "antagonistic policy", but rather from BAD policies that were pursued during the first 2 years of Obama's Presidency when the left-wing of the Democratic party controlled the Executive and BOTH houses of Congress.

In his populist desperation, the big O has decided to paint his opponents as 'antagonistic" and a do-nothing Congress. And you fall for such ridiculous crap!!?? No wonder the country is in trouble, with such ignorant voters.

Mr. Fincioen's essay nicely draws the contrast between the President and the current field of Republicans. At the margin of the essay-in-chief, I was struck by his reference to Obama's motives:

"The friendly explanation is he has no clue how a free market economy works. The more stringent view is he hates the free market and wants to destroy it."

On this matter there is, of course, a long-standing debate. For me it was resolved when I read Alinsky's Rules For Radicals. After making allowance for differences in intellect, knowledge and prose, one can easily imagine he is reading from Obama's teleprompter.

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